Melbourne auctions: New COVID-19 lockdown tipped to slow property market

Localised lockdowns are tipped to slow the Melbourne auction market, but the extent of the damage remains to be seen, property experts say.

It comes after a lacklustre June, where auction numbers and clearance rates were lower than they typically would be, but still better than recent months.

Domain economist Trent Wiltshire said it wasn’t just the 10 locked-down postcodes that would be hit by new restrictions.

“Clearly it will have an impact on the suburbs in the postcodes under lockdown but it has the potential to have a broader impact across the city, particularly the northern and western suburbs,” he said.

“If you’re neighbouring the lockdown suburbs, you may see some people switch to private treaty or postpone until August.”

Mr Wiltshire said the lockdown could hit buyer confidence across the city too.

“These outbreaks are going to hit people’s incomes,” he said. “They’ll be less confident about purchasing because there’s a greater chance of further outbreaks.”

Auction numbers had been steadily rising over June, with the first weekend of July at a lower-than-typical level because of school holidays.

Last week there were 510 auctions scheduled, this week there are just 356.

In the lockdown postcodes, there are still 40 auctions scheduled, including eight in Craigieburn, five in Brunswick West, five in St Albans and four in Ascot Vale.

“There’s been a decent recovery for Melbourne, June’s clearance rate was 54 per cent which was up from May,” Mr Wiltshire said. “We’re seeing fewer properties withdrawn and it’s not a strong market in any sense but given the recession due to COVID-19 it’s reasonable.”

Barry Plant chief executive Mike McCarthy said he had about 10 of 76 offices affected by the lockdown, either directly or indirectly.

He felt the previous, city-wide lockdown had prepared agencies to become adept at managing other options to sell.

“We’ve been through it before and they’ve all pivoted very quickly and are getting deals done,” Mr McCarthy said. “Some have brought auctions forward to beat the deadline but most have been moved to a private sale or an online auction.”

He said homes would still need to be bought and sold.

“The need to buy or sell property is still there. You won’t have people out there doing it for fun,” said Mr McCarthy. “But we won’t have the Melbourne pastime of people going for a sticky beak in those suburbs.”

Belle Property Albert Park director David Wood said the locales on the other side of town should be able to move on as they have for the past month.

“People are still willing to come along, there’s a platform for people to bid online, that can happen so they can still participate,” he said.

Mr Wood was more concerned with attracting willing sellers.

“There’s a lot of vendors who don’t need to sell who are not bringing their homes to market at the moment,” he said. “The turnover hasn’t let them buy something, so then they’re not prompted to go to market.”